JSE-listed Harmony Gold said yesterday it had concluded a landmark five-year wage agreement that ensures stability and continued certainty on its fixed labour costs for the next five years.
The deal for the period July 1 to June, 30, 202 will take effect on July 1 and is in respect of increases to wages and other conditions of service with Harmony’s five labour unions - the National Union of Mineworkers, Uasa, Solidarity, Association of Mineworkers and Construction Union and National Union of Metalworkers of South Africa.
“This agreement will result in an increase of approximately 6% per annum over the five-year period, which is within Harmony planning parameters,” the company said..
Harmony CEO Peter Steenkamp said: "For the first time in our 73-year history, we have concluded a five-year wage agreement with all of our labour unions. This is testimony to the strength of our labour relations and ensures stability and continued certainty on our fixed labour costs for the next five years.
“This milestone agreement has been reached three months before the existing agreement's expiry. It is fair and balanced, considering the impact that increases in the cost of living are likely to have on employees over the next five years,” he said.
Steenkamp said Harmony was pleased that the wage negotiations were carried out in good faith and commended all parties for demonstrating good leadership by engaging constructively.
“Our people are our top priority, and I thank everyone involved in making this possible," he added.
Abigail Moyo, the spokesperson of the trade union Uasa said, “Uasa is pleased to be a part of rewarding negotiations given the current economic challenges many companies face, especially in mining. The cost of living has workers on edge as inflation skyrockets.
“We welcome the agreement between organised labour and Harmony Gold for the financial benefit of its employees and our members,” Moyo said.
The share price of Harmony as up 0.85% at R164.17 at 3.40pm, having risen 136.22% over the past three years.
In February, Harmony reported that in the half year period to end December 2023 it had lifted headline earnings per share by 226% to R9.56 per share against the backdrop of elevated operating free cash flow that soared 265% to R7.1 billion.
At the time it said it was maintaining a long-term outlook on South Africa.
Wages were as follows:
– Category 4 employees would receive a wage increase of R1 200 in year 1; R1 250 in year two; R1 300 in year three; R1 450 in year four; and R1 500 in year five.
– B-lower employees would receive a wage increase of R1 200, or 6.2%, in year 1; R1 250 or 6.2% or CPI (consumer price index) in year two, R1 300, or 6.2%, or CPI in year three; R1 450, or 6.35%, or CPI in year four; and R1 500, or 6.5%, or CPI in year five.
– Miners, artisans and officials would receive a wage increase of 6.2% in year one; 6.2%, or CPI, in year two; 6.2%, or CPI, in year three; 6.35%, or CPI, in year four; and 6.5%, or CPI, in year five.
In addition to the basic wage increases, the parties agreed that the current monthly housing allowance would increase R3 360 in year one, R3 480 in year two, R3 660 in year three, R3 840 in year four and R4 020 in year five.
Furthermore, the current monthly living-out allowance would increase by R100 to R2 800 in year one, R100 to R2 900 in year two, R150 to R3 050 in year three, R150 to R3 200 in year four and R150 to R3 350 in year five.
Employees not making use of available company-provided accommodation were eligible for either a housing allowance or a living-out allowance, but not both, Harmony said..
Several non-wage related and process issues had also been agreed to, including increasing the current guaranteed minimum severance and medical incapacity payments, medical aid co-contributory benefits, and maternity and paternity leave.
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